Superannuation Splitting in Family Law Property Settlements
When a couple separates or divorces, diving assets can be a complex process – and superannuation is often one of the most significant assets to consider.
Superannuation splitting allows separating couples to fairly divide their retirement savings.
In this guide, we explain how superannuation splitting works, the options for superannuation splitting and the first steps you can take to start the process of superannuation splitting.
How superannuation splitting works
Superannuation splitting allows separating couples to divide their superannuation entitlement as part of their property settlement, even though the funds remain persevered until retirement.
This split is not converted into cash – instead, a portion of one party’s super fund is transferred into the other. This process requires accurate valuation of the superannuation interest and strict compliance with legal procedures.
Once the split is completed, both parties maintain their own super accounts with the transferred amount subject to the usual rules around access and taxation.
Options for splitting superannuation
There are various routes you can take when seeking to split superannuation and separating couples can choose between three main options.
Option 1: Enter into a formal written agreement
A formal written agreement is an agreement between the two parties that usually determined the base and percentage of how the superannuation will be split. A lawyer must sign a certificate, stating that independent legal advice about the agreement has been made. Once the agreement is completed, there is no need to go to court. However, this means that it will not be filed with the court so it’s important that you each of you keep your own copy.
Option 2: Seek a consent order
Consent orders are mutual agreements on how the superannuation should be split between the parties. Once taken to court, the court will determine if the terms are just and equitable. If this is satisfied, the order will be formalised.
Option 3: Seek a court order
Court orders are used when the parties cannot come to an agreement with superannuation splitting. It is likely a court hearing will be required but if an agreement is reached at any stage, this is not necessary.
You must file an application with the court and must inform your superannuation fund trustee about the orders you are seeking as they must have an opportunity to attend court hearing and object to the orders you are seeking.
The first steps to start your superannuation splitting
Step 1: Obtain valuation information
The most important step is to obtain the valuation information from your super. You should provide two forms to the trustee of your superannuation fund:
- Form 6 Declaration
- Superannuation Information request form
Keep in mind that some superannuation funds charge a fee to obtain this information. Additionally, if the information from the trustee is not enough to value the superannuation, an expert may need to provide further investigation.
Step 2: Decide the method of splitting
As mentioned above, there are three ways to split your superannuation. It’s important to carefully consider which option for superannuation splitting is most appropriate for your situation. Each pathway has its own distinct legal requirements, costs and implications.
We recommend seeking professional legal advice to help you understand your legal rights and responsibilities and help guide the process for you.
Need Help with Superannuation Splitting?
Chatswood Family Lawyers are experienced in handling all aspects of superannuation splitting.
We can help you understand your rights, undertake legal processes, and secure appropriate care arrangements for your children.
Have a look at our property division services for more information.
Call us on (02) 9412 4500 or reach out via our contact form for a confidential consultation.